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Vol. 20 No. 11 — December 2003

Mark Rowse, Ingenta's founder and CEO, has led the company through its inception and growth, including several rounds of funding and a listing on the London Stock Exchange in May 2000. Ingenta now has around 160 staff members worldwide, with offices in Oxford and Bath, U.K.; Boston; and Providence, R.I. He talked with me recently about the company's technology investments and product initiatives as well as industry trends.

Q: What led you to found this venture to disseminate scholarly research materials? It seems like somewhat of a stretch given your background in law doing mergers and acquisitions, and then at Spafax, which supplied media to the airlines.

A: It may seem like a stretch, but actually it's a fairly logical leap from the previous business. Fundamentally, my skill set is in identifying markets that are about to change and then pulling together a new business to facilitate that change. My work in supplying video content to the airlines in the '90s got me involved in the world of digital content—and particularly in the delivery of digital content in a highly secure environment.

As the Web emerged as a delivery medium, I began to consider markets that could be affected. I think there are surprisingly few marketplaces that have been completely altered by the Web. But I felt that certain parts of the publishing industry would be fundamentally affected. I did some investigation into the scholarly publishing marketplace and saw a need. I established Ingenta as a business that could help the societies, associations, and publishers in that space, and the libraries and end users, to fulfill the promise of the Internet to allow users to access scholarly content in a much more useful, convenient, and value-added way than on paper.

Q: From my perspective, Ingenta has come a long way in just 5 years. You've bought competitors like CatchWord, made key acquisitions like UnCover, partnered with companies like Gale, and diversified to develop multiple revenue streams. What do you think have been the key factors in your progress?

A: I think the key factor of the company's success has been sticking consistently to a single vision of the kind of business we tried to create—a vision that perhaps we haven't articulated as clearly as we should have. Essentially, Ingenta is two different things. Firstly, it is a business serving the needs of publishers. We build Web sites for their journals, we help them reach the academic and institutional marketplaces, and we help generate revenue for them. Allied to that, we also have an e-journal access platform, which assists libraries in managing access to the e-journals they subscribe to and provides a kind of customer-service function for publishers. Secondly, we then have a range of Web-based tools that assist libraries and users in locating and viewing the publishers' content. The combination of the two businesses is at the heart of Ingenta's growth and is also different from the companies that try to compete with us.

We promise publishers that we'll put their content on the Web and build them a great site. And I think we're pretty good at that. But we also promise that we'll help them increase traffic. I think that, increasingly, journal pricing and income are going to be more closely related to the amount of usage the content gets. So if we can help them increase usage, we'll also help increase the publishers' revenues.

Q: Ingenta started with an academic focus and was geared mostly to STM publications. Now you've branched into other subject areas, including social science, business, and humanities. And you've reached beyond academia into corporate settings. What's your intention? To be everything to everybody?

A: We've had a very clear focus and it has always been broader than STM. We have a set of technology tools that help publishers producing periodical content and selling it by subscription to be used by researchers. So while many of these are within the STM journal sector—and this is where much of the early investment by publishers has gone—in fact we meet the needs of a much broader range of publications and intended use.

Q: But how are you reaching into the corporate marketplace—something very different from academic libraries?

A: It is different and it's not a promise we can make as strongly to our publishers. But about 30 percent of our usage base is from the corporate sector. We have three-quarters of the Fortune 500 companies in the U.S. and of the FTSE 100 in the U.K. using our service—which I think the publishers would have found very difficult to reach on their own.

Q: The home page of Ingenta's site states: "The most comprehensive collection of academic and professional publications available for online, fax, and Ariel delivery. Search 15,234,518 articles from 28,139 publications." But the search capabilities are quite limited in comparison to other services, particularly in STM databases that employ special indexing and taxonomies, and services that offer full-text searching.

A: We certainly aren't trying to position Ingenta as an alternative to the aggregated databases, such as [those] offered by Gale, EBSCO, or ProQuest. Those companies have a fundamentally different business model. They are aggregating content and reselling it to libraries.

We claim to be the most comprehensive, freely available e-journal access platform. We are not an abstracting or indexing service, and we don't have an editorially controlled collection. Most users would prefer to search in a Web of Science or Chemical Abstracts or Sociological Abstracts than in a more random collection like Ingenta.

But the Ingenta e-journal access platform should be seen as a way for libraries to wire multiple entry points into journals from their own systems. About two-thirds of our use is directly from library catalogs or from abstracting-and-indexing services like Cambridge or ISI. We are more interested in helping the librarian help the user to find the full text than we are in whether the patron uses our interface. And we're interested in maximizing access to the content on behalf of our publishers.

Q: Back in June 2002, you announced a partnership with Gale for a service to make scholarly journal content available in a single search interface. The deal added access to Ingenta's journals through Gale's InfoTrac service.

A: Yes, that was launched about 15 months ago. There are now several hundred libraries that have taken our service up. It's been instrumental in Gale retaining and winning a number of key consortial markets. And as you know, there have been very tough conditions for the last year or so.

Q: Besides Gale, what other services do you partner with?

A: We have linking arrangements with about 150 different partners. From an inward linking perspective, I think that makes us probably the largest linking target. We have always specialized in linking technology. Recently, we completed a linking deal with JSTOR. For our humanities and social sciences publishers, it provides a fantastic resource. Citations at the end of their articles can resolve back to historic materials held in the JSTOR archive. It's a very valuable service.

But that's only a very small part of our total linking capabilities. It encompasses the resolution capabilities within CrossRef and also benefits from a large number of agreements we've made independently with full-text hosts and abstracting services. I believe we have the largest link resolution database anywhere in the world.

Q: Let's talk about how Ingenta is doing in these difficult times. In mid-2001, you said you expected the company to be profitable by the end of the year. But we all know how tough things became after that. Recently, the company said it expected to produce its "maiden pre-tax profit" for this fiscal year. Tell us how things are going.

A: This is a key moment in Ingenta's history. It is our fifth anniversary and the stock market has been expecting us to move into profitability during the second half of the year. And we are on track to do that. Now that we've established the company as a profitable entity, we can look forward with a different perspective to continuing to grow and develop our business in the future.

About a year ago, we had to significantly adjust the expectations of the stock market to the level of profits we would produce, and implement a company reorganization. Over our first 4 years, we had gathered about 260 publisher customers, but to be honest, we were a bit patchy in delivering for those customers. Over the last year, we've been internally focused. We have focused on streamlining our processes, becoming more efficient, and making sure we were delivering on the promises we were making to our customers.

We've also tried to be more responsive. One of the key building blocks of that this year was the hiring of Janet Fisher of MIT Press, a very senior and respected member of the scholarly publishing community in the U.S. She is now responsible for managing relationships with our U.S. customers. She is hiring an expanding team to make sure we are looking after people properly. We've made a lot of progress.

We've also been re-engineering some core technology and investing significantly in our global server network, amounting to about $2 million of investment over the last year or so. The usage of the Ingenta service has doubled over the last year on a month-by-month basis. To keep performance levels up, we've upgraded servers and invested in more servers, such as in mainland China. Ingenta now maintains 60 servers worldwide.

We are constantly moving our technology forward and progressively rolling out improvements. We try to avoid having large technology leaps, which can be quite disruptive for customers.

Over the summer, we released an entirely new subscription-access management system, which is at the heart of our e-journal access platform. It was rolled out seamlessly with very little disruption. It will enable us to provide increasingly sophisticated access control and information commerce services. Another description for this might be digital rights management. The publishers we work with tend to have fairly complex business models, and the system we've introduced allows for flexibility and change in their models. You'll be hearing more about access control from us over the coming year.

Over the last 18 months or so, we've had a large engineering effort to bring together the ingenta.com and ingentaselect.com platforms. ingentaselect is the old CatchWord platform. We have not wanted to disrupt users or take away any functionality as we merge the two. We have now replaced almost all the underlying technology components of both systems. We're looking forward to revealing within the next few months a single system that combines the best of both. This will give us a new-generation look and feel, and will position us much more clearly in the marketplace as a publisher-services business, which also has a library-facing, e-journal access platform.

We talked about our expanded linking to partners like JSTOR, but in the past year we've also extended the dynamic linking capabilities of our technology. I think this is a key differentiator from how most others do linking. We don't use any fixed URLs, but maintain a dynamic link-resolution database, which means we can keep links fresh. If you hardwire a URL into a citation and the document gets moved, the URL doesn't work.

Q: But how does this work with the DOI (Digital Object Identifier) system? Aren't you bucking the trend toward standardizing links?

A: One of the difficulties of the DOI system is that it uses a fixed URL system, and it's the publisher's responsibility to keep this information updated—and not all publishers do this. So it's not as reliable as it should be. I think dynamic linking works better from a technical standpoint, but I'm not saying that DOI and CrossRef are doing things wrong. We incorporate those links within our database. But we aim to provide a very high level of resolution capability.

Increasingly, we are trying to enable people to resolve to links that aren't part of the CrossRef system and maybe not even in full text. In cases where an article has not yet been digitized, our system can usually link to an abstract. So we are taking a much broader approach.

In addition, one of the technologies we've progressively worked on is the ability to accurately render special characters in full-text SGML and XML. Over the last few months, we've developed an effective tool for rendering MathML, which had been a problem for some publishers. This has been a fairly major technology leap for us. We're now accepting content from publishers in PostScript, PDF, or full-text SGML or XML. Our toolkits can now deal with multiple formats.

Q: What about plans for the future?

A: We feel we have interesting times ahead to grow and develop as an independent company. Our short-term focus is to make sure we deliver for our customers. We have a very substantial level of activity going on. We work with 260 publishers. We regularly process content from around 6,000 journals. We have about 15,000 libraries registered and using Ingenta—this is up about 25 percent in the past year. So we have a lot to do to keep people happy.

We continue to grow the business organically. Even in the last year when we were internally focused, we added about 30 new publishers. Longer term, you'll see us back in growth mode, and we'll be much more visible in the marketplace. We expect to grow all our divisions in the coming year.

Q: What companies do you see as major competitors? My guess would be HighWire, MetaPress from EBSCO, and Infotrieve in the article delivery business.

A: I would include all of those companies and say we certainly compete well against each of them in each specialty area. I think the key difference with Ingenta is that we provide such a broad range of services and have demonstrated that we can deliver for customers consistently and in scale. It's very easy to promise new things—[but it's] very hard to deliver reliably for 6,000 titles to 15,000 libraries.

Q: How do your revenues break out?

A: Building Web sites for publishers is about 40 percent of our revenues, processing journals through our e-journal access platform for publishers is about 45 percent, and about 15 percent comes from the library market through pay-per-view transactions and alerting services.

Q: Are there any specific product plans you can talk about at this time?

A: An interesting new development is the work we're doing with Oxford University Press (OUP) for Oxford Scholarship Online, which will be the world's largest monograph site when it launches later this year. At launch, it will have around 1,000 monograph titles. In the creation of that site, we developed a whole set of new technology tools, which means we can now handle books and collections of books. We'll be limiting our offering there to books sold on subscription. The Oxford site is quite visionary in transforming the business model for monographs. It moves the OUP from single sales of books to libraries to subscription sales.

Q: So are these e-books you produce? And are they delivered in PDF or another format?

A: E-book is a broad word and implies things we won't be doing, so I guard against using the term. The book is delivered in the browser as HTML. I think the reason OUP will be so successful is that it applies the online journal model to books. A library can have unlimited access to this collection of monographs for a single annual subscription. This is very different from how the e-book business has evolved, using a number of models that mimic individual books in the library. I think that unlimited searchability and access to hundreds of monographs will be very appealing.

Q: Actually, it sounds similar to what Knovel is doing with sci-tech books. Also, ebrary is creating a searchable database of books.

A: Yes, it is similar. But a key difference is that we aren't licensing content from publishers and reselling it. We will offer publishers the opportunity to create their own Web sites and sell directly to libraries.

Another major set of initiatives will be providing tools for publishers so they can integrate loading content into Ingenta as part of their in-house production systems. At this time, publishers send us content and we process it. We'd like to offer publishers the option to use a toolkit to directly upload content to their site. This could result in huge savings in both cost and time. It also gives publishers more control of how the content is presented.

We also expect to release an automated reference extraction technology that will significantly enhance the reference linking area. For example, a PDF document with untagged reference citations usually requires a manual process to identify and turn those references into live citation links. Our tool will automate this process, so it will be cheaper for publishers to implement.

Many publishers want to digitize their archive content. There are two big problems with that. One is how to create header metadata, and the other is how to make the reference links live—both without having to incur the expense of re-keying the text to get full-text SGML. In the coming months, we will be releasing tools that will automatically create header data from PDF documents and automatically extract and resolve citations as reference links. These tools will significantly reduce the costs of putting up an online archive, benefiting both publishers and scholars.

Many of these new technologies will be showcased at Ingenta Labs, a new area of our Web site that we'll be launching during the fall.

Q: I recall an article about Ingenta by Information Today columnist Mick O'Leary, [published] in January 2002, which criticized the pay-per-view article purchasing for having confusing, unpredictable, and high costs for articles. Can you comment on whether that has been addressed?

A: I'm afraid these are issues that belong to the publishers, rather than to Ingenta. We have a completely consistent pricing strategy that is the same for every article. Where it varies is the royalty costs set by the publishers, and this can vary from zero to $100. As part of our contract with publishers, we have to sell articles with whatever royalties the publishers want. So if it seems unpredictable or high, it is the result of dealing with 260 different publishers.

Q: We've touched on some trends in the industry, including difficult economic conditions and linking, but I'd like to hear your thoughts on other trends you observe.

A: Academic librarians as a group, over the last year or so, seem to have identified much more clearly how they can add value in a connected world, through the creation of library-level services that integrate the content they buy from a wide range of sources.

I think that over time, you'll see tighter integration between our e-journal access platform and the kind of toolkits that librarians are able to use. Increasingly, search engines and library portals will use sources like RSS data feeds to create their own services for users, regardless of the interfaces created by publishers or intermediaries like Ingenta. Users can be alerted to content on Ingenta without even knowing where it is. I think these are very good types of initiatives.

Libraries are under continuing budget pressure, and yet publishers are saying they need to increase their revenues. So I suspect that librarians are being even more creative than in the past about using budgets for different purposes. While many libraries' overall budgets might be down, I suspect that budgets for electronic serials purchasing have grown.

Q: With commercial publishers wanting to raise their prices, what about the growing trend toward open access journals that are providing free access to scholarly journals on the Internet? The initiative seems to be gaining momentum.

A: It is gaining momentum, but it's still a long way from achieving critical mass, in my view. I think the commercial publishers have to appreciate how their business models may have to change if they are to retain their position—which they certainly can, even in a changing world. At the most basic level, there is a cost to produce a journal. Whether that cost is covered by submission fees or by access fees is a less important issue. In either case, the publisher can have a role.

Imagine a publisher that has already licensed content to all the library consortia in the U.S. The publisher could, at a stroke, say that the license will now confer rights for the academics in those institutions to submit content rather than to access content. The publisher would have successfully flipped its business model completely, to being an open access business. So I think it's possible to see a transition from where we are now to a completely open access world without fundamentally destroying the existing scholarly publishing business.

Q: That's a very interesting scenario. I have one final question about another trend. The new Microsoft Research Pane in the next version of Office is providing links to traditional content providers like Ovid, LexisNexis, and Factiva. What do you think of this? And is it something Ingenta might consider?

A: We'd be very happy to work with that initiative, just as we would be with some of the things Google is doing. I think Google is becoming the de facto, non-library search engine, like it or not. We decided some time ago there was no point in trying to compete with that but to try to be as supportive as possible.

Q:
Any final comment?

A: Ingenta and the whole scholarly communications marketplace have been through rather turbulent times. I'm very happy that all our hard work over that last year has resulted in a very stable business, and I look forward to a successful continuation of that growth in 2004.